Early retirement, Personal development

Luck and bias in the FI mindset

How many times did your stars align to help you toward your current financial status? I was reading The Ermine’s well written post entitled ‘FIRE is for the few not Many‘ , which discusses the important role of luck on the journey to financial independence (FI). I must agree, if you’re aiming for FI, you’re already the top 1-4 percenters in the world! Didn’t you know? Check it out here. I found this out some years ago and it’s good to remind oneself regularly.

Do you recognise the role of luck in your life?

Here are some ways I’ve been INCREDIBLY lucky..

  • I was born in the UK, a developed country with universal healthcare etc.
  • My parents were pretty frugal and I watched them work hard as I was growing up
  • I have good health and no disabilities
  • I live in a time of high technology, so society values thinking skills over brawn
  • I did not pay university tuition fees and even got money to live on
  • I met the Programme Lead of the Masters degree I did who knew about a university bursary to do a research degree (which only one other student applied for)
  • After around 9 job interviews around the country, I saw a job advertised that had a higher than expected starting salary in my home city
  • My home city is quite diverse but the cost of living is or at least can be very reasonable
  • Record low interest rates most of the time I was paying off my/our mortgage
  • My job has a good pension scheme; much of it under a ‘final salary’ arrangement
  • A recent (at the time) law disallowed multiple serial fixed term contracts, so effectively I have a level of job security higher than many
  • I have a temperament for delaying gratification and remaining quietly persistent, and an eye for detail. I like to think I’ve chosen to be this way but I’m sure that’s not the case

And I’m sure that isn’t even the half of it! So, even though we’re inclined to think about our financial misfortunes (that could be a post in itself!), because they were very painful lessons to be learned (dot com bubble losses, being a lowly postgrad before house prices shot up etc. etc.), the vast majority of those aiming for FI are very, very lucky. I was lucky to be born in the right place at the right time with a decent start in life and rose in these conditions.

It’s definitely made me grateful…. but I probably still don’t realise just how lucky I am. The fact I live in a place and time in which I’m not culturally expected to financially look after my parents already makes us 90% ahead of the pack. Yes, I’m digging deep, because there’s so much we take for granted. Even compared with my next door neighbours, I may be luckier than how it looks on the surface. I’m definitely more Gen X than they are!

Cognitive biases

Some FIers writing on social media seem to have a case of what’s called ‘self-serving bias‘ – the cognitive tendency to think – maybe largely subconsciously – that when bad things happen (e.g. investments fall), we attribute it to external forces (e.g. the ways of the market). Yet when good things happen (e.g. investment growth), we attribute it to our own skills (our investment prowess and uncanny ability to time things right, obvs!).

This bias doesn’t just happen to FIers, of course. But in order to justify the lifestyle self-discipline that’s endured by many on this path, the tough decisions made leave them to shun the consumerist world they were part of just a few moments earlier. The ego takes a pedestal. Pff, these victims to consumerism and lifestyle inflation. Why haven’t they worked out the secret yet?

Cognitive dissonance comes to mind: the psychologically uncomfortable state first mentioned by Leon Festinger of having thoughts, beliefs, or attitudes that are inconsistent especially as relating to behavioural decisions and attitude change. You want to remove the discomfort of making optimal and frugal purchasing decisions and the fast track is by diminishing and criticising consumerist ideas.

And I totally get why that is; the path to FI isn’t easy yet it is attainable by those born into and/or living in the right conditions for it and who work at it consistently. Those who discover FI feel like they’ve discovered alchemy. They’ve come out the matrix. I’m not immune either. I’ve been known to feel I’m ‘beating’ the system. And yet, there is a place for gratitude and humility – at least for me there is. You may make a less conventional approach, but you have not come out of the matrix. Indeed, if you’re buying into the market – you’re buying a piece of the matrix. Actually, that sounds pretty cool! But I digress…

Taking for granted what comes easily

Given the right socioeconomic conditions, the last bullet point above must be key – temperament or personality. My sister who’s barely a year younger than me also had a lot of luck on her side, but she has historically not been a spendthrift. As a child, she was always asking for pocket money ‘in advance’, and she still does love to spend on life’s material luxuries! Essentially, her attitude to money is different. Her strategy is to live now. It would probably be too overwhelming for her to live my lifestyle. It’d probably be like The Secret Millionaire. Well, almost! (Not really.)

From an FI viewpoint, I am lucky to have this temperament. In Path 2, I will enjoy a relatively low cost lifestyle. This is what I prefer. But from another perspective (e.g. building a business), I probably don’t have the personality required to thrive well. While I’m quietly squirreling money away, my sister is flogging designer wedding accessories for twenty times what I’d ever pay, then going on Disneyland cruises and fun stuff like that. Good for her. Different things work for different people. Clearly FIers are not one personality, but there’s probably a range of personalities suited to FI. Don’t you think?

Clearly, luck itself isn’t enough. Consistent action – of saving, of investment – is necessary if we’re to reach FI, and that’s where you “make your own luck”. So, this post is not to undermine the belief of personal control over finance as I’m sure that’s a major factor that differentiates the FIer from their conventional neighbour.

But don’t deny the role of luck.


Do you feel the stars have shone down on you? How? Do you tend to dwell on your financial misfortunes?

4 thoughts on “Luck and bias in the FI mindset”

    1. Thanks for your response! Yes, I probably didn’t emphasise that, but definitely if you are a grateful person you will be a generally happier one. 🙂 On the other hand, emphasise the role of luck too much and you probably sink into imposter syndrome. The most successful are those who have a high sense of personal control AND acknowledge the role that luck played. It’s a complex thing to master!


  1. Timely reminder to be grateful for what we have, the ability and means to choose our path in life and for those moments of ‘luck’. Great post. Love the positive tone.


    1. Thank you, Mr Simple Life. 🙂 I’m definitely all for maximising our ‘luck’ and looking out for opportunities that come our way. All the best with your own path.

      Liked by 1 person

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.